U.S.-Ukraine Relations: A New Century Agenda

U.S.-Ukraine Security Dialogue

U.S.-Ukraine Relations: A New Century Agenda

Paul M. Carter, Jr.

Remarks by Dr. Paul M. Carter, Jr., Ukraine Desk Political Officer U.S. Department of State, delivered during the U.S.-Ukraine Security Dialogue, Washington DC, June 23, 2005.

Thank you Professor Zaryckyj for the introduction, thank you Congressman Weldon for your generous remarks, and thank you to the American Foreign Policy Council, the Center for U.S.-Ukrainian Relations, the Ukrainian Congress Committee of America, and the Congressional Ukrainian Caucus for the invitation to speak today. U.S.-Ukrainian relations and security policy are important issues and particularly topical right now. We”ll have many speakers today discuss specific aspects of security policy. I would like to put this into a larger political context by describing for you briefly the current overall picture of U.S.-Ukraine relations, how we see the relationship developing, and some of the challenges and opportunities that lie ahead.

U.S.-Ukrainian relations have entered a new era. For years relations were in a kind of holding pattern. After a warm period in the early and mid-nineties, relations from the late nineties until the Orange Revolution were not what we wanted. The United States never forgot the strategic importance of Ukraine or lost faith in the Ukrainian people. But the scandals, corruption, and human-rights violations of the Kuchma leadership retarded close contact. The Orange Revolution changed that and started us on a new trajectory of open dialogue and closer cooperation.

But the Ukrainian people”s choice for freedom and democracy was only the first step in a long journey. After the exhilaration of the Orange Revolution, now comes the less dramatic – but no less important – work of reforming the Ukrainian polity, economy, and society and preparing Ukraine to become a full-fledged member of the Euro-Atlantic community. The success of the Ukrainian government in this endeavor is critical in many respects – first and foremost for Ukraine and the Ukrainian people; equally important for the model it could offer to the region; and third, for the positive impact it could have on Ukraine”s relations with the West.

The Challenges Ahead

The challenges, to be sure, are many. For one, the Orange Revolution lifted expectations very high. Meeting those expectations will require hard work and sustained implementation of political and economic reforms. In eastern and southern Ukraine, large Russian-speaking majorities opposed candidate Yushchenko in the presidential campaign, and some regional officials spoke of federation, autonomy, and even secession. President Yushchenko and his government have much work to do to convince former Yanukovych supporters and to ensure the unity of the country and make Ukraine a cohesive unit. President Yushchenko”s anti-corruption policies will directly challenge those who have made a living from corrupt practices. The new government has begun to prosecute some offenders and to remove officials who abused their positions. It is vital that members of the new government not succumb to the temptations of corruption. It”s important and good that the new government be held to high standards. A free media can play an important part in exposing instances of corruption.

Many in Ukraine are already looking intently at the 2006 Rada elections. President Yushchenko will try to maintain a working majority in the Rada. At same time, he and his government must avoid measures that may in the short term curry favor with voters but in the longer term threaten reforms, liberalization of the economy, and achievement of such goals as WTO membership. In the long run, free-market reforms are what will boost prosperity, not short-term populist measures. Further complicating this picture is the fact that Yushchenko”s government is a coalition, with ministers and others drawn from different parties with different philosophies and different political interests. Still, adopting measures that the country will later regret – or postponing critical reforms out of short-term political expediency – can only harm the interests of Ukraine and its people. There”s a need for everyone to speak from the same page and to avoid splits in the government. Political infighting is not unique to Ukraine – we have our share of it in the United States, but it”s important that political competition not burden the new government and keep it from doing the important work of reform.

Foreign relations pose another set of challenges. President Yushchenko has set integration with European and Euro-Atlantic institutions as a primary goal. The U.S. strongly welcomes and warmly embraces this orientation. But eventual membership in the EU and NATO will depend on Ukraine”s willingness and ability to implement difficult political, economic, and military reforms. NATO membership cannot be taken for granted. There is a lot of hard work to be done. There is a lot of political goodwill toward Ukraine in Washington, but Ukraine must be sure not to lose momentum. A democratic, prosperous Ukraine is the best possible neighbor for Russia, and we understand President Yushchenko is working hard – as are we – to convince Russian President Putin of this fact. At same time, we must be realistic and bear in mind that Russian-Ukrainian relations face their own set of challenges in the wake of the Orange Revolution.

Last, but certainly not least, in terms of challenges is the deep-seated legacy of Soviet communism. Years of Soviet domination exacted a terrible toll on the Ukrainian people. Ukrainians have made great strides in reclaiming their heritage, but I don”t need to tell you how difficult is the task of eliminating the last vestiges of totalitarianism.

A New Century Agenda

As President Yushchenko and the Ukrainian government tackle these challenges, Ukraine can count on the support of the United States. During President Yushchenko”s recent visit to the United States, he and President Bush signed a joint statement outlining what we call a New Century Agenda for the American-Ukrainian Strategic Partnership. If you have not read this document, it is available on the White House website, and I recommend it. It succinctly lists concrete aspects of our cooperation and will serve as a kind of action plan” for U.S.-Ukraine relations. Let me mention a few of the issues it highlights.

The United States and Ukraine will work together to strengthen democratic institutions in Ukraine and to advance freedom in Europe, its neighborhood, and beyond. We will work to defeat terrorism wherever it occurs and to advance economic development, democratic reforms, and a peaceful settlement of regional disputes. In the area of economic policy, the United States and Ukraine will cooperate closely on issues that are vital to Ukraine”s growth and prosperity. As a first step, the Ukrainian government will seek expeditious U.S. recognition as a market economy. I understand that the Ukrainian government has submitted an application, but since this is a quasi-judicial process, success cannot be taken for granted. We are committed to working together to achieve Ukraine”s accession to the World Trade Organization and to moving as rapidly as possible to lifting the provisions of the Jackson-Vanik amendment. We are initiating an energy dialogue to advance Ukraine”s plans to restructure and reform its energy sector to encourage investment, diversify and deepen its energy supplies, bolster commercial competition, and promote nuclear safety.

In terms of international relations, the United States pledges to support Ukraine”s NATO aspirations and to help Ukraine achieve its goals by providing assistance with challenging reforms. We remain grateful for Ukraine”s contributions in Iraq and recognize the ultimate sacrifice some Ukrainian service members have made in defense of freedom and security there. The fight against proliferation of weapons of mass destruction and their means of delivery is one of the most important issues facing the international community today. The United States and Ukraine will deepen cooperation on nonproliferation, export controls, border security, and law enforcement.

The security and stability of nations increasingly depends on the health, well-being, and prosperity of their citizens. The United States and Ukraine therefore have committed to cooperate on a broad agenda of social and humanitarian issues, including halting the spread of HIV/AIDS and TB; fighting organized crime, trafficking in persons and child pornography; and completing the Chornobyl Shelter Implementation Plan. At the recent EBRD meeting on nuclear safety and the Chernobyl Shelter Fund, the United States made a pledge of $45 million. We also support a bold expansion of contact between our societies. To this end, the United States and Ukraine will work to lower barriers that separate our societies and to enhance citizen exchanges, training opportunities, and cooperation between business communities of both countries.

The Record So Far

Admittedly, this is an ambitious agenda. Some tasks are longer term in nature, others can be completed fairly quickly. The agenda was adopted just two and a half months ago. Let”s consider for a moment our progress so far in implementing it.

For its part, the United States has taken important steps. We proudly led support of the Allies for an offer to Ukraine of an Intensified Dialogue on NATO Membership Issues. ID is a significant new stage in Ukraine”s relationship with NATO. It provides a platform for Ukraine to work closely with NATO in Brussels to prepare Ukraine for the Membership Action Plan program, the formal path to NATO membership. Also in terms of NATO, the United States announced it would take lead-nation status in the Partnership-for-Peace program to destroy obsolete and excess weapons and munitions in Ukraine. Given the size of the problem in Ukraine, the NATO PfP destruction program is fittingly the largest such destruction program ever undertaken anywhere.

The United States also took a key first step in a new Energy Dialogue. Secretary of Energy Bodman recently visited Kiev to initiate this dialogue, stressing the importance of market-based solutions. The Bush Administration won Congressional support for $60 million in additional funding for assistance to Ukraine. Belt tightening has begun throughout the U.S. Government, but it is indication of the great importance Congress places on relations with Ukraine that it adopted the full $60 million for Ukraine that the Administration requested. We are working now to ensure that these funds will help the new government pursue the highest priorities, such as combating corruption and instituting the rule of law.

Ukraine for its part has also taken important steps. For example, during its first 100 days, the Ukrainian government ended the practice of providing temniki” to guide journalists and has strengthened press freedom. President Yushchenko recently said that temniki were a thing of the past. In a May meeting with some 40 Kiev-based media representatives, he emphasized that freedom of the press remained a fundamental priority for his administration. He even thanked them for unbiased and justified criticisms.” He also has renewed his commitment to solving the Gongazde case and bringing to justice those responsible for the murder. The Ukrainian government has removed corrupt officials and instituted other measures to fight the scourge of corruption that has eaten away at the Ukrainian economy and society.

We applaud Kiev”s decision to expand our dialogue on nonproliferation issues, and we are pleased to note a new openness in discussing such issues. President Yushchenko”s energetic steps to engage Western leaders and institutions is laudable, and we commend Ukraine for making the right decision to support the UN Human Rights Commission resolutions on Cuba and Belarus. We are pleased with the leadership demonstrated by Ukraine at the recent GUAM Summit – and recently President Yushchenko was in Ankara welcoming Turkey”s participation in this organization as an observer. GUAM is turning into the kind of organization we have wanted to see – one in which the member states take responsibility and the lead. We are also encouraged by Ukraine”s helpful engagement on Transnistria.

The Way Ahead

These and other measures that the Ukrainians have already taken are, of course, only the first steps on the reform path. We are encouraged by these measures. But we will also watch closely to monitor progress. We support Ukraine”s efforts to join WTO and its graduation from Jackson-Vanik amendment. But the protection of intellectual property is essential to the realization of Ukraine”s aspirations. We were quite disappointed when optical disk legislation recently failed to pass the Rada, although we understand that the Ukrainian government is trying again to get a bill through the Rada. Until such legislation passes, it is impossible to consider removing Ukraine”s Special 301 designation and accompanying sanctions. High barriers to meat imports and the fact that the Rada hasn”t lowered agricultural tariffs also make progress on WTO negotiations difficult.

We are concerned as well about some of the economic policies that the Ukrainian government has been pursuing to control prices and lift wages and pensions. These measures may make sense in terms of strengthening popular support in advance of the 2006 Rada elections. But such policies could fuel inflation, reduce macroeconomic stability, and undermine prospects for sustainable, long-term prosperity. We are concerned about the talk by some senior officials about the virtues of state ownership of economic assets and the uncertainties surrounding the difficult question of re-privatization of enterprises. An unfortunate, but predictable, result of all this is a sharp drop in investment. Investors are concerned by the government”s intervention in energy prices and mixed signals on re-privatization.

There are enormous expectations of the new government. Fair or unfair, many people will judge the new team in Kiev by its ability to meet some, if not all, of these expectations. A strong start is very important, but we must also understand that transforming Ukraine into what we all want to see – a prosperous, democratic, strong member of the international community – will not happen overnight.

We are in close touch with the Ukrainian government to discuss these and many other issues. Ambassador Herbst meets with high-level Ukrainian officials daily. Secretary Rice and other high-level officials from the State Department, the Department of Defense, and other U.S. agencies often meet counterparts at various international meetings and frequently discuss important issues by phone. Senior Administration officials and members of Congress travel to Ukraine on a regular basis, and at any particular time our embassy in Kiev is in the process of making preparations for two or three delegations.

Finally, it is important to mention the role that NGOs and other private organizations play. We often focus on government-to-government contacts. But equally significant to relations are, of course, the thousands and thousands of private business, academic, social, and other contacts.

As we move forward, much work remains. Indeed, we are only beginning the journey to full integration of Ukraine in European and Euro-Atlantic institutions. But Ukraine can count on U.S. support and we look forward to moving ahead smartly with implementing our new agenda of cooperation.

Thank you for your attention. Now I think we have a few minutes for questions.